The Impact of Intellectual Property Rights Protection on Innovation in developing countries: a Panel Data Investigation

Abstract

In this paper, we try to analyze the relation between IPR reforms and innovation by looking for factors through which intellectual protection could affect innovation in developing countries using a Poisson and Negative binomial model. We pay particular attention to the impact of the investment on innovation and tried to capture the non-linear behavior of IPR protection. The results demonstrated the existence of nonlinearities between IPR and innovation taking the form of an inverted U-shaped Curve indicating that intellectual reform affects differently the developing countries. For the less developing ones, the expected positive effect of IPR reform on innovation could be expected through “the signal effect” of relatively better institutions, property protection, and law enforcement. While for the developing countries with higher income per-capita and important capacities of absorption and more developed National System of innovation the effect is expected to be negative. The main cause is that the rising cost of imitation and the legal constraint would hinder seriously the capacities of emerging countries in inventing around and then decrease the adaptative innovations in this group of countries.

Keywords: Intellectual Property Rights, Innovation, Absorptive capacities, National System of Innovation